First, the quality of offshore IT workers is woefully inadequate – particularly when it’s to replace longer term tenured IT professionals.

Foreign governments and big business are clearly conspiring to insulate their best interests at the expense of middle class US IT workers. Lets stop to consider the current global economic situation – which is due in it’s entirety to a profit motive run amok among the global banking community. The author seems to suggest we take advantage of that – which is kind of like yelling ‘fire’ in a crowded theater isn’t it?

We know that fully half of IT outsource engagements fail. Why don’t we study the reasons for the failure instead of hyping some philosophical myths? Here are some suggestions for that.

1. Quality of the offshore workers as compared to those they’re replacing.
2. Depth of knowledge and familiarity with the technology.
3. High reliance on standardization and processes that zap productivity and innovative nature of IT workers.
4. Difficulties in cultural and language impediments that impact customer service, command and control, timeliness of project implementation, and so forth.

There’s nothing religious about thousands of global companies arbitrarily relocating thousands of jobs form one country to another to save money. The US economy is 2/3 dependent on consumer spending. What’s the impact of radical wage reductions on thousands of those consumers? I suspect the price of goods doesn’t come down – on any order of magnitude comparable to the economic impact to any consumer whose spending is impacted by becoming outsourced.

There’s the rub in the end. What goes around comes around. When we undermine our ability to consume in the west – it has global ramifications on all industry sectors. The only equilibrium that is reached ‘naturally’ is one that is sought by Industry and Government. We should know that now in the wake of the banking scandal.

The only myth here is the presumption that outsourcing is inherently a good thing.

]]>By: Toddmcdanielhttp://itknowledgeexchange.techtarget.com/total-cio/9-it-outsourcing-myths-and-the-outsourcing-facts-cios-should-consider/#comment-514
Mon, 16 Nov 2009 14:46:17 +0000http://itknowledgeexchange.techtarget.com/total-cio/?p=980#comment-514Markpup hit the nail on the head but I wanted to add a few points myself.

Outsourcing, especially in the IT arena, is very popular. Many companies see IT as nothing more than a cost and on paper it is. This is the major factor in companies choosing to go the route of outsourcing – well that and articles like this one promoting the virtues of outsourcing. But you have to take into consideration where all these pro-outsourcing articles are coming from.

These pro-outsourcing articles are virtually always produced by the companies that use and promote outsourcing. And often these same companies have some of the best people and means for selling the idea to U.S. corporations hungry for more profitability. It seems the larger the corporation the more out of touch the upper-management is with the details of their own IT departments and thus the easier the sell of outsourcing.

There are real dangers of copyright infringement and and trade secret loss, not to mention the outsourcing companiescan use the products they produce for a corporation as a selling point to competitors, so the competitive edge they thought they were gaining with their new systems is lost because competitors will be using basically the same systems.

The outsourcing companies will strongly deny such acticity but they can’t control the lowly paid employees from jumping ship and taking their working knowledge with them. And just think about trying to pursue legal issues in another country!

But the biggest danger, in my humble opinion, is turning the U.S. into a third-world economy! Think about it for a minute (that’s the real problem is most people and corporations don’t take the time to think things through to the end). IT is one of the biggest decent paying sectors of our economy and that sector is diminishing rapidly due to outsourcing. In time – and that time could be much shorter than most think – high tech workers will be turning into much lower paid workers. Not all will be working at Wal-mart, but most will find they will have to take a cut in pay of 50% or more to compete with offshore IT conglomerates. (think about taking a 50% cut in your own pay!)

As average salaries diminish spending will also diminish and U.S. corporations will sell less and less domestically. To increase sales they will have to think globally but to sell globally pricing will be forced even lower because of the increased competition. A downward death spiral.

Many years ago my grandfather used to say, “the capitalist will sell the rope that is used to hang him!” I fully believe this is the case with outsourcing (especially offshoring).

]]>By: Markpuphttp://itknowledgeexchange.techtarget.com/total-cio/9-it-outsourcing-myths-and-the-outsourcing-facts-cios-should-consider/#comment-513
Sun, 15 Nov 2009 23:52:28 +0000http://itknowledgeexchange.techtarget.com/total-cio/?p=980#comment-513I have over 25 years of IT experience and I’ve never ever seen outsourcing benefit a company – except maybe to get a manager or two promoted. When I read this article all I see is someone telling a management team somewhere their justification for “cutting costs” is the right choice it’s not based on reality. The company, the US, the consumer and certainly the IT people displaced all suffer the only beneficiary is the lucky outsourcing company that gets the work – and produces 10% of what you need at 60% of the cost – and the cost of not getting what you need drives you negative in a hurry.

The fundamental problem is communication for any complex IT project the devil is in the fine details and how various teams – QA, development, project managers handle those. It’s difficult and challenging to get that communication right with everyone in one place and on more or less the same page – with outsourcing you add to that cultural, time, distance, political, motivational, technical and business knowledge barriers that make an effective project almost impossible. The one point “shared services are difficult to manage” is not a myth in fact it’s a massive understatement.

As one anecdotal example, one company I know (won’t name names) deliberately outsourced a major system precisely because they wanted it dead. That worked.

]]>By: HEITceohttp://itknowledgeexchange.techtarget.com/total-cio/9-it-outsourcing-myths-and-the-outsourcing-facts-cios-should-consider/#comment-512
Fri, 13 Nov 2009 19:44:45 +0000http://itknowledgeexchange.techtarget.com/total-cio/?p=980#comment-512What about Myth #10? [B]Myth: Offshoring is better value than Domestic Outsourcing.[/B] We have seen a huge uptick in domestic selective outsourcing in lower cost US areas that beat offshoring in value and are a lower TCO. You don’t have the “difficult to manage” problem or the ethical /religious challenge of “not doing what is best for your country.” Plus, there is still a trust and liability situation for security of systems outside your country.
]]>By: AminAdatiahttp://itknowledgeexchange.techtarget.com/total-cio/9-it-outsourcing-myths-and-the-outsourcing-facts-cios-should-consider/#comment-511
Fri, 13 Nov 2009 17:35:59 +0000http://itknowledgeexchange.techtarget.com/total-cio/?p=980#comment-511When the outsourced job has gone it is not likely that the original employee will be assigned to the better/improved job due to enterprise growth. A programmer does not magically transform into a data modeller/business analyst. The person has gone and the enterprise was not interested. There is not a 1:1 ratio of programmer to Modeller/Analyst job movement but rather N:1 where N is likely an order of magnitude higher.

Yes it is a “religion” type debate and it all comes down to personal ethics and how one views local society. Better to have 100 people working than 10 with 90 “under-employed” in my society. The 90 will contribute more to my society if working ” normally” as opposed to being replaced by the “outsourced resource” who will contribute very little to my society.